You want to start saving money for your retirement. You want toretire in 35 years...

You want to start saving money for your retirement. You want to retire in 35 years and think you will need to accumulate $1,500,000 to maintain your desired lifestyle after you retire. If you are confident you will be generating 6% annual rate of return, how much do you have to save each month?

Group of answer choices

$1,121.73

$712.74

$1,052.85

$8,552.85

Solutions

Expert Solution

Future value to accumulate in 35 years = $1500,000

Calculating the amount need to save each month using FV of ordinary annuity formula:-

Where, C= Periodic Payments

r = Periodic Interest rate = 6%/12 = 0.5%

n= no of periods = 35 years*12 = 420

C = $1052.85

So, the amount have to save each month is $1052.85

Option 3

jeff jeffy answered 2 years ago

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